TORONTO (Reuters) - Resale house prices in Canada fell 7.7 percent in March from a year earlier, but sales rose from February, the Canadian Real Estate Association said on Wednesday.
The average home price in Canada was C$288,641 ($238,546) in March, down from C$312,852 a year earlier, CREA said.
Home prices were lower in 14 of 25 major markets that the association measures, led by Greater Vancouver. The average price of a home in Greater Vancouver, which had seen a very sharp run-up in prices in the past few years, was C$530,763 in March, down 13.9 percent from a year earlier.
Other Western Canadian cities also felt sharp price pressure, with average home values still down more than 10 percent in Victoria, Calgary and Edmonton.
The biggest increase in home prices was in the Atlantic province of Newfoundland and Labrador, up 24.3 percent from a year earlier to C$198,057.
But the average national price “continues to be skewed downward” because of fewer transactions at the higher end of the spectrum, CREA said.
However, in an encouraging sign that the housing market may be stabilizing, there was a pickup in sales for a second consecutive month.
Nationally, 31,135 homes were sold in March, up 7 percent from February on a seasonally adjusted basis and building on February’s 10.3 percent rise from January.
British Columbia posted the largest increase in sales, up 13.6 percent, and Ontario followed with a 10.5 percent rise.
“On the whole, the report does provide some evidence that Canadian housing market activity may have improved modestly in recent months as homebuyers take advantage of the improved buying conditions -- namely, low mortgage rates and more affordable prices,” said Millan Mulraine, economics strategist at TD Securities. “This is certainly encouraging.”
He also added that the overall housing market would remain “soft” in the months ahead.
While the housing market is showing some signs of life, there is risk that consumer confidence can fall quickly amid a fragile economic environment where job losses have been steep this year.
“Further price declines and low mortgage rates will ultimately help trigger a recovery, but a reversal in the wave of job losses is one major prerequisite still outstanding,” noted Robert Kavcic, an economist at BMO Capital Markets.
On a year-over-year basis, sales were down 20 percent in March on a seasonally-adjusted basis. Actual sales fell 13.7 percent, the smallest year-over-year decline in six months.
Reporting by Ka Yan Ng; editing by Rob Wilson